One of the the biggest selling points of Nintendo's Wii video game console since its launch nearly two years ago has been that it was the lowest-priced of the trio of next-generation machines, which also includes Microsoft's Xbox 360 and Sony's PlayStation 3.
To date, the Wii costs $249, while the lowest-priced Xbox, the so-called "Arcade," retails currently for $279. An 80GB PS3 sells for $400.
But Microsoft said Wednesday that it will drop the price of the Arcade on Friday to $199, breaking through what some have said is the all-important psychological price level of $200. At that price, industry observers say, the market opens up to mass levels of consumers.
Microsoft will also drop the price of its 60GB Xbox to $299 and its "Xbox Elite," which has a 120GB hard drive, to $399.
"The fact that the Xbox 360 is now cheaper than the Wii is definitely a big shift in the market," said Aaron Greenberg, director of product management for Xbox 360.
For Microsoft, this is a crucial step along its path toward winning the next-gen console wars. At E3 in July, the company said in no uncertain terms that it will win the battle, at least with Sony. It hedged its bets on out-selling the Wii, which has been dominant over the last several months, according to industry analyst NPD Group.
In fact, BusinessWeek reported that Don Mattrick, senior vice president of Microsoft's interactive entertainment business unit (and the person who had been on-stage at E3 and committed to winning the generation), said that he doubted the Xbox could catch up to the Wii at this point. … Read more